PARTIAL RULING
Setting aside, and recognition of award
1. There are two opposing applications before the court. One is brought by the applicant and the other by the respondent under sections 35 and 36 of the Arbitration Act. On 5 May 2025, the court directed that both applications be heard back-to-back with the section 35 application being determined first. The rationale for taking this court is that the applications are inextricably linked and constitute the two sides of the same coin.
Applicant’s Section 36 application
2. The first in time is the applicant’s, Parbat Siyani Construction & Elite Earth Movers JV Limited (Parbat) notice of motion dated 13 December 2024.
3. Parbat mainly seeks the adoption and recognition of the final award of 8 January 2024 and the additional award of 4 November 2024 as a decree of the court.
4. The application is supported by the affidavits sworn by Parbat’s director, Mukesh Halal on 13 December 2024, 31 January 2025, 1 April 2025 and 7 August 2025.
5. The respondent, Kenya Rural Roads Authority (KeRRA) opposed the application through replying affidavits sworn by Eng. Charles Kwena Osore on 15 January 2025 and 21 May 2025.
Section 35 Application
6. Through the chamber summons dated 2 May 2025, KeRRA seeks to set aside a portion of the award totaling to Kshs. 1,533,898,436.46/- pursuant to section 35 of the Arbitration Act.
7. The application is supported by an affidavit sworn by Eng. Charles Kwena on 2.5.2025.
8. The application is opposed by Parbat through the replying affidavit sworn by Mukesh Halai on 18.6.2025.
9. Parbat and KeRRA filed written submissions dated 10.12.2025 and 15.12.2025 respectively.
Background
10. The dispute arose from three construction contracts, dated 19 September 2017 namely: -
(1) Upgrading to Bitumen Standard and Maintenance of Kilgoris – Shartuka – Soiti – Murkan – Emurua – Dikirr – Road contract (RWC 488)
(2) Upgrading to Bitumen Standard and Maintenance of Olchapesei – Kabolencho Mugondo and Mugondo – Dikirr – Roads contract (RWC 489)
(3) Upgrading to Bitumen Standard and Maintenance of Mulot – Sogoo – Tendet Saplet & Ololunga Roads contract (RWC 491)
11. Parbat declared a dispute under sub-clause 67.2 (b) of the Conditions under Contract No.s RWC 488, 489 and 491. Dr. Kenneth Wyne Mutuma was appointed as the sole adjudicator (Dispute Adjudication Board – DAB).
12. Following an adjudication award in favour of Parbat for Kshs. 2,709,561,599.18 with interest, KeRRA referred the matter to arbitration. The Sole Arbitrator, Hon. Justice (Rtd) E. Torgbor, issued a series of awards, namely: -
(1) First award dated 8 January 2024;
(2) Additional Award dated 4 November 2024;
(3) Reconciliation statement dated 18 March 2025; and
(4) Final Award dated 18 March 2025.
13. The Arbitrator awarded Parbat a final sum of Kshs. 2,486,440,095.53 plus interest.
KeRRA’s case
14. KeRRA identifies five specific heads of the award it seeks to impugn: -
(a) Interim Payment Certificates (IPCs) of Kshs. 551,790,694;
(b) Interest on delayed payments of Kshs. 166,322,621;
(c) Finance Charges of Kshs. 280,227,239.28;
(d) Prolongation Costs of Kshs. 485,557,882.18; and
(e) an Additional Facility from KCB of Kshs. 50,000,000.
15. KeRRA contends that the IPCs and interest were outside the scope of reference because they were not among the issues framed by the parties for determination.
16. Regarding finance charges and prolongation costs, KeRRA argues these are contrary to public policy. It is submitted that the Arbitrator expressly dismissed these claims in the reasoned award and the reconciliation statement yet erroneously included them in the final award for additional payments.
17. KeRRA contends that the award of Kshs. 50,000,000.00 for a KCB facility was neither pleaded nor framed as an issue.
18. KeRRA further argues that the award is inimical to the national interest as it would lead to an unjust enrichment of Parbat at the expense of the public, particularly given the country's current financial struggles.
19. KeRRA relies on: -
(1) Christ for All Nations v Apollo Insurance Co. Ltd [2002] 2 EA 366 to define public policy as being inconsistent with the Constitution, inimical to national interest, or contrary to justice and morality.
(2) Article 159 (2) (c) of the Constitution
(3) Republic v Cabinet Secretary Ministry of Lands & Physical Planning & 2 others; Musyimi (Exparte); Kilonzi (Interested Party) (Judicial Review E004 of 2022) [2023] KEELC 21857 (KLR) (29 November 2023) (Judgment); to advance the argument that, every administrative action or decision made by quasi-judicial agencies must be legal, fair, just, rational, reasonable, and pass the test of procedural propriety. It should also be devoid of bias, and reflect justice.
(4) Evangelical Mission for Africa & another v Kimani Gachuhi & another [2015] eKLR; to the effect that the process of arbitration must also deliver justice
(5) Article by Teresa Giovannini, What are the Grounds on which awards are most often set aside? (The Institute for Transnational Arbitration’s, Eleventh Annual Workshop/ Dallas 15th June 2002, The Making and Enforcement for Arbitral Award.
Parbat’s Response
20. Parbat submits that KeRRA’s application is incompetent in that it ought to have been filed in a separate miscellaneous cause. It also submits that the application does not meet the requirements under sections 35 and 37 of the Arbitration Act.
21. Parbat contends that grounds raised in support of KeRRA’s application are incompetent because they do not fall within the scope of section 37. It also contends that KeRRA’s application is an attempt to appeal the arbitrator’s decision contrary to section 32 and the terms of the contract.
22. Parbat asserts that both claims for outstanding IPCs and interest on delayed payments were pleaded by both parties before the Arbitrator. That the claims formed the basis for its application for the additional award dated 5 February 2024. That KeRRA had the opportunity to challenge the claims before the Arbitrator. It highlights that KeRRA admits at paragraph 8 of the supporting affidavit of Charles Kwena Osore of 2 May 2025 that it sought to recover Kshs. 551.790.694.00 outstanding payment on the IPCs and Kshs. 166,322,621.00 as accrued interest thereon. It therefore contends that KeRRA cannot approbate and reprobate in law.
23. Parbat submits that KeRRA did not challenge the decision of the DAB to award it the outstanding IPCs and accrued interest sought. It highlights that KeRRA admitted the amounts owed under the two heads in its pleadings and during cross-examination.
24. Parbat submits that this court lacks jurisdiction to review or sit on appeal over the Arbitrator’s findings. It also faulted KeRRA for not challenging the Arbitrator’s jurisdiction earlier under section 17.
25. Parbat asserts that the parties agreed that the Arbitrator’s decision would be final. That an appeal can only be made with prior agreement of the parties involved in the dispute as per section 39.
26. Regarding the Kshs. 50,000,000.00 award for loss incurred in securing an additional facility from KCB Bank Kenya Ltd, Parbat asserts that this is another attempt to invoke the court’s appellate jurisdiction.
27. Parbat submits that the claim for this amount was challenged by KeRRA through its application dated 1 March 2024 where it sought its deduction from the final amount awarded on the basis that it was not pleaded. It highlights that it opposed the application and that the Arbitrator found that the amount had been claimed and extensively canvassed by both parties.
28. As regards the award of prolongation costs of Kshs. 485,557,882.00, Parbat asserts that it filed an application dated 12 November 2024, under section 34 requesting a factual/ arithmetic correction to the initial award of 4 November 2024. It contends the amount was mistakenly deducted from the final award despite being claimed. It also asserts that the Arbitrator considered both its application and KeRRA’s response challenging it and allowed its application to include the amount claimed in the reconciliation statement award published on 29 November 2024.
29. Parbat highlights that KeRRA, being dissatisfied, filed an application dated 3 December 2024 seeking deduction of the amount claiming that it was correctly removed from the summary of items in the additional award. However, the Arbitrator declined to amend or correct the award through his award of 18 March 2025.
30. Parbat argues that KeRRA has failed to show how the final award is illegal or inconsistent with public policy. It also argues that since the amount awarded represents a fair and just determination of the claims, it is not enough to simply state that the amounts are huge as a reason to set aside the arbitral award.
31. Parbat therefore submits that the final award published on 8 January 2024, additional award published on 4 November 2024 as corrected on 29 November 2024 and 18 March 2025 are not contrary to public policy and should be adopted as a decree of the court and it be granted leave to enforce the same.
32. Parbat urged the court to dismiss KeRRA’s application and to allow its application as prayed.
33. Parbat relies on: -
(1) Kenyatta International Convention Center v Congress Rental South Africa on the jurisdiction under sections 35 and 39.
(2) Vickers Security Services Limited v Public Procurement Administrative Review Board & 3 Others on the principle that issues arise from pleadings filed and evidence presented by parties.
(3) Justus Nyang’aya v Ivory Consult Limited and Rsamji Karman Holdings Limited v D. Manji Construction Limited on the principle that courts should hesitate to interfere with the award on ground of jurisdiction raised for the first time before the court.
(4) Placid View Properties Limited v Etihad Cap Africa, Anne Mumbi Hinga v Victoria Njoki Gathara and Kenya Pipeline Company Limited v Kenya Oil Company Limited & Another; an appeal to the High Court is allowed on questions arising from the award only if the parties have agreed that such an appeal could be made.
(5) Christ for All Nations v Apollo Insurance Co. Ltd [supra] and Mall Developers Limited v Postal Corporation of Kenya on public policy.
ANALYSIS AND DETERMINATION
34. Two inextricable issues emerge out of the two application: -
(1) Whether the final arbitral award published on 8 January 2024 and the additional award published on 4 November 2024 as corrected on 29 November 2024 and 18 March 2025 should be set aside or
(2) Whether the final arbitral award published on 8 January 2024 and the additional award published on 4 November 2024 as corrected on 29 November 2024 and 18 March 2025 should be recognized as binding and enforceable as a judgment of the court.
Competency of KeRRA’s application
36 However, a preliminary question was raised by Parbat challenging the competency of KeRRA’s application on grounds that it ought to have been filed in a separate miscellaneous cause.
37 Where there has been a referral suit, section 7 of the Arbitration Act is instructive. The purport of stating that upon referral of the dispute to arbitration, the suit remains undetermined is to keep the suit alive for; any lawful intervention by the court; and to await the outcome of the arbitration. In such scenario, the award should be filed in the said suit and so are any other attendant or consequential applications including section 35 and 36 applications.
38 In practice, however, parties have often filed applications under sections 35 and 36 of the Arbitration Act in separate miscellaneous causes and away from the referral suit.
39 The practice has caused confusion and led to the determination of a section 36 application before the consideration and determination of a pending section 35 application. See the Water Irrigation case. A scenario that could lead to an injustice and deprivation of the right to be heard of the party who is aggrieved by an arbitral award on a challenge to the arbitrator’s decision under section 35 of the Arbitration Act.
40 The court conscientiously directed that both applications be heard back to back with section 35 application be considered and determined first as it inevitably impacts the section 36 application.
41 Hence, where the applications have been filed in separate miscellaneous causes, courts have found it proper to hear them together or through consolidation.
42 In all these instances, the two applications are considered to be the two sides of the same coin and are so dealt with to avoid prejudice and possible confusion.
43 For the above reasons, Parbat’s challenge of the competency of KeRRA’s application on the basis that it ought to have been filed in a separate miscellaneous cause fails.
Setting aside award
44 Section 35 (2) sets out the grounds for setting aside an award as follows: -
“(2) An arbitral award may be set aside by the High Court only if—
(a) The party making the application furnishes proof—
(i) that a party to the arbitration agreement was under some incapacity; or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication of that law, the laws of Kenya; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv)the arbitral award deals with a dispute not contemplated by or not falling within the terms of the reference to arbitration or contains decisions on matters beyond the scope of the reference to arbitration, provided that if the decisions on matters referred to arbitration can be separated from those not so referred, only that part of the arbitral award which contains decisions on matters not referred to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless that agreement was in conflict with a provision of this Act from which the parties cannot derogate; or failing such agreement, was not in accordance with this Act; or
(vi) the making of the award was induced or affected by fraud, bribery, undue influence or corruption;
(b) the High Court finds that—
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law of Kenya; or
(ii) the award is in conflict with the public policy of Kenya.”
45 KeRRA’s main grievances are that the Arbitrator went beyond the scope of the reference and contravened public policy
46 These fall under section 35 (2)(a) (iv) and (b) (ii) above.
Did the arbitrator go beyond the scope of the reference?
Interim payment certificates and interest on delayed payments
47 The ground that the arbitrator went beyond the scope of the reference is in relation to the awards in respect of the interim payment certificates (IPCs) of Kshs. 551,790,694; interest on delayed payments of Kshs. 166,322,621 and an additional facility from KCB of Kshs. 50,000,000.
48 KeRRA contended that these two awards were not among the issues framed by parties for determination.
49 Parbat asserted that all three portions of the award had been claimed in the pleadings. It also highlighted that KeRRA admitted the amounts owed under the two heads in its pleadings and during cross-examination.
50 Paragraph 8 of the affidavit sworn by Eng’ Charles Kwena on 2 May 2025 reads: -
“8. I know that at arbitration, the Respondent made a counterclaim of Kshs. 2,709,561,599.18
i. Outstanding payment of certificates Kshs. 551,790,694.00
ii. Interest on delayed payments Kshs. 166,322,621.00
iii. Claim for additional payments Kshs. 1,634,971,892.28
iv. Special damages Kshs. 356,476,391.90…”
51 At pages 9-10 of the Additional award of 4 November 2024, the Arbitrator observed: -
“(VI) Whether or not the payment of Outstanding IPCs and interest is an issue to be determined by the Tribunal?
The Employer submits the payment of outstanding IPCs and the accruing interest was not an issue framed for determination by this Tribunal but for consideration by the parties per the provisions of the contract citing in support, the case TeeJay Estates Ltd vs. Vihar Construction Ltd to the effect that an arbitrator's function is to resolve only issues raised by their Parties.
The Contractor submits seeking an Award for Kshs. 491,301,339.65 revised to Kshs. 551,790,694.00 for unpaid but certified interim certificates also termed outstanding payments under the three contracts and Kshs. 166,322,621.00 for accrued interest also termed interest on delayed payments on the unpaid IPCs as at 5th August 2022 in the counterclaim dated 13th December 2022 and that and the issue was specifically pleaded and proven before this Tribunal and the Employer's witness specifically admitted the amount claimed in cross examination as owed to the Contractor but was unpaid and further that, although it was a live issue, it was not included in the list of agreed list of disputed issues because of its admission by the Employer. The Contractor concludes that the amount should be included in the additional award to facilitate its recognition, enforcement and execution by the High Court. The Contractor also relies on its submissions at Para. 23-42 in support of that of an additional award.
The Tribunal is persuaded by the Contractor's submission that this issue was pleaded and the Employer's witness admitted in cross examination that these amounts were owed to the Contractor but unpaid, and that this although it was a live issue it was not listed because of its admission by the Employer. The Tribunal therefore confirms these amounts for inclusion in this Additional Award to facilitate its recognition, enforcement and execution as prayed by the Contractor.”
52 From the above, there is no contest that the issues regarding the interim payment certificates and interest on delayed payments were pleaded. Although KeRRA claimed that the issues were not listed as agreed issues for determination, the Arbitrator in the award confirmed that the two issues were pleaded but not listed as issues for determination because they were admitted by KeRRA.
53 KeRRA having admitted that the issues were pleaded by Parbat, cannot be heard to argue that the two heads were not issues for determination by the arbitrator.
54 The purpose of framing issues is to limit and direct the court to the real controversy or contest between the parties. Ordinarily, in a civil procedure including arbitral procedure, admitted issues or facts need not be listed as issues for determination by the court or tribunal because an issue arises only when there is joinder of issues; meaning that a material proposition has been affirmed by one party and denied by the other. Where an issue or fact is admitted, the court or arbitral tribunal acts on it as admitted issue or fact on record and is included in and is part of the judgment or award.
55 The court therefore finds that KeRRA has failed to demonstrate that the arbitrator went beyond the scope of the reference as regards the two heads.
Additional facility from KCB
56 KeRRA also challenged the award of the Kshs. 50,000,000 for loss incurred by Parbat in securing an additional facility from KCB Bank Kenya Ltd.
57 Parbat submitted that the Arbitrator found that this amount had been claimed and extensively canvassed by the parties.
58 At pages 10-11 of the Award, the arbitrator observed: -
“(VII) Whether or not the amount of Kshs. 50,000,000.00 for additional facility for KCB should be part of the findings in the award of finance charges?
The Employer submits that the Tribunal awarded the sum of Kshs. 50,000,000.00 for additional facility by KCB as finance charges but that the amount was not part of the Contractor’s claims under finance charges in paragraph 226 of the Contractor’s Response and Counterclaim”. However, in the findings of the initial Award, the Tribunal awarded Kshs. 50,000,000.00/- for additional facility by KCB to be deleted from the total awarded finance charge (ii) of the Award. “The Employer therefore prays that the amount of Kshs. 50,000,000.00/- for additional facility by KCB to be deleted from the total awarded finance charges in the findings” (per Column 6, page 3 of the Employer’s Summary Application dated 5th April 2024.
The Employer submits further that this claim was introduced at the submissions stage of the arbitration and submissions are not pleadings citing the cases of Teejay Estates Ltd v Vihar Construction Ltd [2022] KEHC 121 (KLR) and The Republic Chairman Public Procurement Administrative Review Board & another, Ex Parte Zapkass Consulting and Training Limited & another [2014] eKLR (at para 43, page 7 of Employer’s submissions, dated 1 August 2024)
The Contractor submits in response that “The Contractor did not seek an award on this head of claim” and “The amount cannot therefore be removed from the sum of Kshs. 1,634,971,892.28 as it did not form part of the said amount” (per Column 6, page 11, Contractors Summary dated 8th April 2024). The Contractor’s reference to ‘this head of claim’ without clarification or specifying other head of claim is confusing and misleading as on the one hand the Contractor seeks the correction of the Initial award to include Kshs. 50,000,000.00 for the additional facility by KCB under ‘Finance Charges’ in Column 3, page 4 of the Summary Application of 8th April 2024, while, on the other hand, it does not seek a finance charges award of Kshs. 50,000,000.00 in Column 6, page 11 of the Summary Application “as it did not form part of the sum of Kshs. 1,634,971,892.28 which amount (Kshs. 50,000,000.00) “cannot therefore be removed from Kshs. 1,634,971,892.28.”
The Tribunal clarifies and confirms that the amount and award of Kshs. 50,000,000.00 to the Contractor is part of the finance charges claim for the additional facility by KCB which amount was not included in and therefore not deductible from the computation of the amount of Kshs. 1,634,971,892.28 in paragraph 226 of the Contractor’s Response and Counterclaim. The meaning and composition of Finance Charges are stated and explained in page 86 of the Award in terms of which the amount of Kshs. 50,000,000.00 is part of the award of finance charges albeit not included in the DAB’s decision referenced in paragraph 226 of the Contractor’s Response and Counterclaim.”
59 A court should be slow to interfere with factual finding of the arbitral tribunal unless the finding was based on no evidence or far removed from the evidence or plainly egregious.
60 The above rendition by the arbitrator confirms that the amount of Kshs. 50,000,000.00 was indeed claimed by Parbat and considered after hearing the parties on it. Thus, the court finds that it was not beyond the scope of the reference.
Whether the award contravenes public policy
Finance charges and prolongation costs
61 The claim that the award conflicts with public policy is in relation to the awards for Finance Charges of Kshs. 280,227,239.28 and Prolongation Costs of Kshs. 485,557,882.18.
62 KeRRA asserted that the Arbitrator expressly dismissed these claims in the reasoned award and the reconciliation statement yet erroneously included them in the final award for additional payments. That the award is inimical to the national interest as it would lead to an unjust enrichment of Parbat at the expense of the public, particularly given the country's current financial struggles.
63 On the other hand, Parbat submitted that KeRRA has failed to show how the final award is illegal or inconsistent with public policy. It also submitted that since the amount awarded represents a fair and just determination of the claims, it is not enough to simply state that the amounts are huge as a reason to set aside the arbitral award.
64 “Public policy is a broad concept incapable of precise definition. An award can be set aside under Section 35 (2) (b) (ii) of the Arbitration Act as being inconsistent with the public policy of Kenya if it is shown that it was either
(a) inconsistent with the Constitution or any other law of Kenya whether written or unwritten, or
(b) inimical to the national interest of Kenya,
(c) contrary to justice and morality”. Christ for All Nations v Apollo Insurance Co. Ltd [2002] 2 E.A 366
65 While KeRRA claimed that the two claims had been dismissed in the reasoned award, Parbat indicated that they were mistakenly deducted from the award despite being claimed.
66 Parbat indicated that it filed an application dated 12 November 2024 requesting correction of the initial award to include the claims. That the arbitrator included them in the reconciliation statement award published on 29 November 2024. That KeRRA filed an application dated 3 December 2024 seeking deduction of the amount claiming that it was correctly removed from the summary of items in the additional award. They claimed that, however, the Arbitrator declined to amend or correct the award through his award of 18 March 2025.
67 In the initial award, the arbitrator’s finding as to the finance charges of Kshs. 280,227,239.28 was: -
"It is notable that the Contractor has dealt with interest payment on delayed release of retention money under renumbered issue C(iv) and prolongation costs under C (v) which the Tribunal has duly considered. The Tribunal awards the Conttactor (i) the amounts claimed on the delayed payment of IPCs (under Issue F(i), page 101 of this Award) but disallows the claims for additional accrual of interest on special damages and financial charges under issues F(ii) and F (iii) resppectively."
68 As to the prolongation costs Kshs. 485,557,882.18, the Arbitrator found that: -
"The Tribunal is persuaded that by the Employer's submission that the claim for Kshs. 418,584,381.19 now adjusted upwards to Kshs. 485,557,882 is the same claim for increased scope of works under RWC 489 and dismisses this claim with no award."
69 In the additional award, the Arbitrator’s findings on the latter were: -
"The Tribunal determines on consideration of these submissions that as the sum of Kshs. 418,584,381.19 revised upwards to Kshs. 485,557,882.00 for prolongation costs was dismissed in the initial Award it should not be included in the computation of sum of Kshs. 1,634,971,892.28 as additional payment to avoid duplication and over-compensation as prayed by the Employer. Therefore, it is for the Contractor to ensure that a dismissed claim is not reclaimed in this Additional Award."
70 In the revised summary in the additional award both the prolongation costs and the financial charges were deducted from the sum of Kshs. 2,709,561,599.18 awarded by the DAB. The total revised award was Kshs. 1,587,300,086.13.
71 The reconciliation statement award of 29 November 2024 states that: -
“The Revised Summary below clarifies the Tribunal’s initial Award taking into consideration both the Contractor’s ‘corrections’ of the DAB’s computation of the Contractor’s Total Award of Kshs. 2,709,561,599.18 (per paragraph 226 (e), pages 46 – 48 of the Contractors’ Response and Counterclaim.
1
2
3
4
5
6 Claim for additional Payments for RWC 488, RWC 489 and RWC 491
Delayed Release of Retention
Facility Taken Out with KCB
Outstanding Interim Payment Certificates
Interest Accrued on Delayed Interim Payment Certificates (up to 4th August 2022)
Interest Accrued on delayed Interim Payment Certificates from 5th August 2022 – 13th December 2022 Kshs. 1,634,971,892.28
Kshs. 24,514,929.76
Kshs. 50,000,000
Kshs. 551,790,694.00
Kshs. 166,322,621.00
Kshs. 58,839,958.49
7
9 Prolongation costs under RWC 489 (Kshs. 485,557,882.18)
Special Damages Claim (Kshs. 356,476,391.90) Dismissed
Dismissed
10 Total Award Kshs. 2,486,440,095.53
72 In the letter of 3 December 2024, KeRRA sought the correction of the award by the deduction of the prolongation costs and the finance charges from the claim for additional payments.
73 In the letter dated 18 March 2025 the Arbitrator states: -
“...it is clarified that the sum of Kshs.1,634,971,892.28 comprises the claims for Additional Payment for RWC 488, RWC 489 and RWC 491 and does not include the prolongation costs under RWC 489 that was dismissed. Likewise, the dismissed sum of Kshs. 356,476,391.90 is not included in the sum of Kshs.1,634,971,892.28 as apparent...”
74 The arbitrator found that the prolongation costs were not comprised in the claims for additional payment.
75 Therefore, the court finds that there was no demonstration that the award of this head of claim is contrary to public policy.
76 However, the arbitrator did not explain why the finance charges of Kshs. 280,227,239.28 were not deducted from the additional payment as indicated in the initial award and the additional award. This head of claim is also missing from the reconciliation statement.
77 KeRRA has shown that the award in respect of the finance charges were dismissed in the initial and additional awards.
Disposal
35. In conclusion, except the issue of the financial charges stated in paragraphs 76 and 77 of this ruling in respect of which I will issue appropriate orders and directions, all the other issues in the applications before me have been determined.
36. Accordingly, I make the following orders: -
(1) Given the findings of the court, this is most apt case to suspend my decision on the applications to set aside as well as for recognition and enforcement of the award herein in accordance with the spirit in section 35(4) of the Arbitration Act. Therefore, the final decision on both applications is suspended for 60 days to allow the taking of actions below.
(2) The arbitral award, additional award, reconciliation statement award is remitted to the arbitrator for reconsideration and clarification on the issue of the financial charges only. The arbitrator to issue a supplementary or revised award which includes the clarification directed herein within 60 days from today’s date.
(3) Before fi
[...truncated]
Setting aside, and recognition of award
1. There are two opposing applications before the court. One is brought by the applicant and the other by the respondent under sections 35 and 36 of the Arbitration Act. On 5 May 2025, the court directed that both applications be heard back-to-back with the section 35 application being determined first. The rationale for taking this court is that the applications are inextricably linked and constitute the two sides of the same coin.
Applicant’s Section 36 application
2. The first in time is the applicant’s, Parbat Siyani Construction & Elite Earth Movers JV Limited (Parbat) notice of motion dated 13 December 2024.
3. Parbat mainly seeks the adoption and recognition of the final award of 8 January 2024 and the additional award of 4 November 2024 as a decree of the court.
4. The application is supported by the affidavits sworn by Parbat’s director, Mukesh Halal on 13 December 2024, 31 January 2025, 1 April 2025 and 7 August 2025.
5. The respondent, Kenya Rural Roads Authority (KeRRA) opposed the application through replying affidavits sworn by Eng. Charles Kwena Osore on 15 January 2025 and 21 May 2025.
Section 35 Application
6. Through the chamber summons dated 2 May 2025, KeRRA seeks to set aside a portion of the award totaling to Kshs. 1,533,898,436.46/- pursuant to section 35 of the Arbitration Act.
7. The application is supported by an affidavit sworn by Eng. Charles Kwena on 2.5.2025.
8. The application is opposed by Parbat through the replying affidavit sworn by Mukesh Halai on 18.6.2025.
9. Parbat and KeRRA filed written submissions dated 10.12.2025 and 15.12.2025 respectively.
Background
10. The dispute arose from three construction contracts, dated 19 September 2017 namely: -
(1) Upgrading to Bitumen Standard and Maintenance of Kilgoris – Shartuka – Soiti – Murkan – Emurua – Dikirr – Road contract (RWC 488)
(2) Upgrading to Bitumen Standard and Maintenance of Olchapesei – Kabolencho Mugondo and Mugondo – Dikirr – Roads contract (RWC 489)
(3) Upgrading to Bitumen Standard and Maintenance of Mulot – Sogoo – Tendet Saplet & Ololunga Roads contract (RWC 491)
11. Parbat declared a dispute under sub-clause 67.2 (b) of the Conditions under Contract No.s RWC 488, 489 and 491. Dr. Kenneth Wyne Mutuma was appointed as the sole adjudicator (Dispute Adjudication Board – DAB).
12. Following an adjudication award in favour of Parbat for Kshs. 2,709,561,599.18 with interest, KeRRA referred the matter to arbitration. The Sole Arbitrator, Hon. Justice (Rtd) E. Torgbor, issued a series of awards, namely: -
(1) First award dated 8 January 2024;
(2) Additional Award dated 4 November 2024;
(3) Reconciliation statement dated 18 March 2025; and
(4) Final Award dated 18 March 2025.
13. The Arbitrator awarded Parbat a final sum of Kshs. 2,486,440,095.53 plus interest.
KeRRA’s case
14. KeRRA identifies five specific heads of the award it seeks to impugn: -
(a) Interim Payment Certificates (IPCs) of Kshs. 551,790,694;
(b) Interest on delayed payments of Kshs. 166,322,621;
(c) Finance Charges of Kshs. 280,227,239.28;
(d) Prolongation Costs of Kshs. 485,557,882.18; and
(e) an Additional Facility from KCB of Kshs. 50,000,000.
15. KeRRA contends that the IPCs and interest were outside the scope of reference because they were not among the issues framed by the parties for determination.
16. Regarding finance charges and prolongation costs, KeRRA argues these are contrary to public policy. It is submitted that the Arbitrator expressly dismissed these claims in the reasoned award and the reconciliation statement yet erroneously included them in the final award for additional payments.
17. KeRRA contends that the award of Kshs. 50,000,000.00 for a KCB facility was neither pleaded nor framed as an issue.
18. KeRRA further argues that the award is inimical to the national interest as it would lead to an unjust enrichment of Parbat at the expense of the public, particularly given the country's current financial struggles.
19. KeRRA relies on: -
(1) Christ for All Nations v Apollo Insurance Co. Ltd [2002] 2 EA 366 to define public policy as being inconsistent with the Constitution, inimical to national interest, or contrary to justice and morality.
(2) Article 159 (2) (c) of the Constitution
(3) Republic v Cabinet Secretary Ministry of Lands & Physical Planning & 2 others; Musyimi (Exparte); Kilonzi (Interested Party) (Judicial Review E004 of 2022) [2023] KEELC 21857 (KLR) (29 November 2023) (Judgment); to advance the argument that, every administrative action or decision made by quasi-judicial agencies must be legal, fair, just, rational, reasonable, and pass the test of procedural propriety. It should also be devoid of bias, and reflect justice.
(4) Evangelical Mission for Africa & another v Kimani Gachuhi & another [2015] eKLR; to the effect that the process of arbitration must also deliver justice
(5) Article by Teresa Giovannini, What are the Grounds on which awards are most often set aside? (The Institute for Transnational Arbitration’s, Eleventh Annual Workshop/ Dallas 15th June 2002, The Making and Enforcement for Arbitral Award.
Parbat’s Response
20. Parbat submits that KeRRA’s application is incompetent in that it ought to have been filed in a separate miscellaneous cause. It also submits that the application does not meet the requirements under sections 35 and 37 of the Arbitration Act.
21. Parbat contends that grounds raised in support of KeRRA’s application are incompetent because they do not fall within the scope of section 37. It also contends that KeRRA’s application is an attempt to appeal the arbitrator’s decision contrary to section 32 and the terms of the contract.
22. Parbat asserts that both claims for outstanding IPCs and interest on delayed payments were pleaded by both parties before the Arbitrator. That the claims formed the basis for its application for the additional award dated 5 February 2024. That KeRRA had the opportunity to challenge the claims before the Arbitrator. It highlights that KeRRA admits at paragraph 8 of the supporting affidavit of Charles Kwena Osore of 2 May 2025 that it sought to recover Kshs. 551.790.694.00 outstanding payment on the IPCs and Kshs. 166,322,621.00 as accrued interest thereon. It therefore contends that KeRRA cannot approbate and reprobate in law.
23. Parbat submits that KeRRA did not challenge the decision of the DAB to award it the outstanding IPCs and accrued interest sought. It highlights that KeRRA admitted the amounts owed under the two heads in its pleadings and during cross-examination.
24. Parbat submits that this court lacks jurisdiction to review or sit on appeal over the Arbitrator’s findings. It also faulted KeRRA for not challenging the Arbitrator’s jurisdiction earlier under section 17.
25. Parbat asserts that the parties agreed that the Arbitrator’s decision would be final. That an appeal can only be made with prior agreement of the parties involved in the dispute as per section 39.
26. Regarding the Kshs. 50,000,000.00 award for loss incurred in securing an additional facility from KCB Bank Kenya Ltd, Parbat asserts that this is another attempt to invoke the court’s appellate jurisdiction.
27. Parbat submits that the claim for this amount was challenged by KeRRA through its application dated 1 March 2024 where it sought its deduction from the final amount awarded on the basis that it was not pleaded. It highlights that it opposed the application and that the Arbitrator found that the amount had been claimed and extensively canvassed by both parties.
28. As regards the award of prolongation costs of Kshs. 485,557,882.00, Parbat asserts that it filed an application dated 12 November 2024, under section 34 requesting a factual/ arithmetic correction to the initial award of 4 November 2024. It contends the amount was mistakenly deducted from the final award despite being claimed. It also asserts that the Arbitrator considered both its application and KeRRA’s response challenging it and allowed its application to include the amount claimed in the reconciliation statement award published on 29 November 2024.
29. Parbat highlights that KeRRA, being dissatisfied, filed an application dated 3 December 2024 seeking deduction of the amount claiming that it was correctly removed from the summary of items in the additional award. However, the Arbitrator declined to amend or correct the award through his award of 18 March 2025.
30. Parbat argues that KeRRA has failed to show how the final award is illegal or inconsistent with public policy. It also argues that since the amount awarded represents a fair and just determination of the claims, it is not enough to simply state that the amounts are huge as a reason to set aside the arbitral award.
31. Parbat therefore submits that the final award published on 8 January 2024, additional award published on 4 November 2024 as corrected on 29 November 2024 and 18 March 2025 are not contrary to public policy and should be adopted as a decree of the court and it be granted leave to enforce the same.
32. Parbat urged the court to dismiss KeRRA’s application and to allow its application as prayed.
33. Parbat relies on: -
(1) Kenyatta International Convention Center v Congress Rental South Africa on the jurisdiction under sections 35 and 39.
(2) Vickers Security Services Limited v Public Procurement Administrative Review Board & 3 Others on the principle that issues arise from pleadings filed and evidence presented by parties.
(3) Justus Nyang’aya v Ivory Consult Limited and Rsamji Karman Holdings Limited v D. Manji Construction Limited on the principle that courts should hesitate to interfere with the award on ground of jurisdiction raised for the first time before the court.
(4) Placid View Properties Limited v Etihad Cap Africa, Anne Mumbi Hinga v Victoria Njoki Gathara and Kenya Pipeline Company Limited v Kenya Oil Company Limited & Another; an appeal to the High Court is allowed on questions arising from the award only if the parties have agreed that such an appeal could be made.
(5) Christ for All Nations v Apollo Insurance Co. Ltd [supra] and Mall Developers Limited v Postal Corporation of Kenya on public policy.
ANALYSIS AND DETERMINATION
34. Two inextricable issues emerge out of the two application: -
(1) Whether the final arbitral award published on 8 January 2024 and the additional award published on 4 November 2024 as corrected on 29 November 2024 and 18 March 2025 should be set aside or
(2) Whether the final arbitral award published on 8 January 2024 and the additional award published on 4 November 2024 as corrected on 29 November 2024 and 18 March 2025 should be recognized as binding and enforceable as a judgment of the court.
Competency of KeRRA’s application
36 However, a preliminary question was raised by Parbat challenging the competency of KeRRA’s application on grounds that it ought to have been filed in a separate miscellaneous cause.
37 Where there has been a referral suit, section 7 of the Arbitration Act is instructive. The purport of stating that upon referral of the dispute to arbitration, the suit remains undetermined is to keep the suit alive for; any lawful intervention by the court; and to await the outcome of the arbitration. In such scenario, the award should be filed in the said suit and so are any other attendant or consequential applications including section 35 and 36 applications.
38 In practice, however, parties have often filed applications under sections 35 and 36 of the Arbitration Act in separate miscellaneous causes and away from the referral suit.
39 The practice has caused confusion and led to the determination of a section 36 application before the consideration and determination of a pending section 35 application. See the Water Irrigation case. A scenario that could lead to an injustice and deprivation of the right to be heard of the party who is aggrieved by an arbitral award on a challenge to the arbitrator’s decision under section 35 of the Arbitration Act.
40 The court conscientiously directed that both applications be heard back to back with section 35 application be considered and determined first as it inevitably impacts the section 36 application.
41 Hence, where the applications have been filed in separate miscellaneous causes, courts have found it proper to hear them together or through consolidation.
42 In all these instances, the two applications are considered to be the two sides of the same coin and are so dealt with to avoid prejudice and possible confusion.
43 For the above reasons, Parbat’s challenge of the competency of KeRRA’s application on the basis that it ought to have been filed in a separate miscellaneous cause fails.
Setting aside award
44 Section 35 (2) sets out the grounds for setting aside an award as follows: -
“(2) An arbitral award may be set aside by the High Court only if—
(a) The party making the application furnishes proof—
(i) that a party to the arbitration agreement was under some incapacity; or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication of that law, the laws of Kenya; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv)the arbitral award deals with a dispute not contemplated by or not falling within the terms of the reference to arbitration or contains decisions on matters beyond the scope of the reference to arbitration, provided that if the decisions on matters referred to arbitration can be separated from those not so referred, only that part of the arbitral award which contains decisions on matters not referred to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless that agreement was in conflict with a provision of this Act from which the parties cannot derogate; or failing such agreement, was not in accordance with this Act; or
(vi) the making of the award was induced or affected by fraud, bribery, undue influence or corruption;
(b) the High Court finds that—
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law of Kenya; or
(ii) the award is in conflict with the public policy of Kenya.”
45 KeRRA’s main grievances are that the Arbitrator went beyond the scope of the reference and contravened public policy
46 These fall under section 35 (2)(a) (iv) and (b) (ii) above.
Did the arbitrator go beyond the scope of the reference?
Interim payment certificates and interest on delayed payments
47 The ground that the arbitrator went beyond the scope of the reference is in relation to the awards in respect of the interim payment certificates (IPCs) of Kshs. 551,790,694; interest on delayed payments of Kshs. 166,322,621 and an additional facility from KCB of Kshs. 50,000,000.
48 KeRRA contended that these two awards were not among the issues framed by parties for determination.
49 Parbat asserted that all three portions of the award had been claimed in the pleadings. It also highlighted that KeRRA admitted the amounts owed under the two heads in its pleadings and during cross-examination.
50 Paragraph 8 of the affidavit sworn by Eng’ Charles Kwena on 2 May 2025 reads: -
“8. I know that at arbitration, the Respondent made a counterclaim of Kshs. 2,709,561,599.18
i. Outstanding payment of certificates Kshs. 551,790,694.00
ii. Interest on delayed payments Kshs. 166,322,621.00
iii. Claim for additional payments Kshs. 1,634,971,892.28
iv. Special damages Kshs. 356,476,391.90…”
51 At pages 9-10 of the Additional award of 4 November 2024, the Arbitrator observed: -
“(VI) Whether or not the payment of Outstanding IPCs and interest is an issue to be determined by the Tribunal?
The Employer submits the payment of outstanding IPCs and the accruing interest was not an issue framed for determination by this Tribunal but for consideration by the parties per the provisions of the contract citing in support, the case TeeJay Estates Ltd vs. Vihar Construction Ltd to the effect that an arbitrator's function is to resolve only issues raised by their Parties.
The Contractor submits seeking an Award for Kshs. 491,301,339.65 revised to Kshs. 551,790,694.00 for unpaid but certified interim certificates also termed outstanding payments under the three contracts and Kshs. 166,322,621.00 for accrued interest also termed interest on delayed payments on the unpaid IPCs as at 5th August 2022 in the counterclaim dated 13th December 2022 and that and the issue was specifically pleaded and proven before this Tribunal and the Employer's witness specifically admitted the amount claimed in cross examination as owed to the Contractor but was unpaid and further that, although it was a live issue, it was not included in the list of agreed list of disputed issues because of its admission by the Employer. The Contractor concludes that the amount should be included in the additional award to facilitate its recognition, enforcement and execution by the High Court. The Contractor also relies on its submissions at Para. 23-42 in support of that of an additional award.
The Tribunal is persuaded by the Contractor's submission that this issue was pleaded and the Employer's witness admitted in cross examination that these amounts were owed to the Contractor but unpaid, and that this although it was a live issue it was not listed because of its admission by the Employer. The Tribunal therefore confirms these amounts for inclusion in this Additional Award to facilitate its recognition, enforcement and execution as prayed by the Contractor.”
52 From the above, there is no contest that the issues regarding the interim payment certificates and interest on delayed payments were pleaded. Although KeRRA claimed that the issues were not listed as agreed issues for determination, the Arbitrator in the award confirmed that the two issues were pleaded but not listed as issues for determination because they were admitted by KeRRA.
53 KeRRA having admitted that the issues were pleaded by Parbat, cannot be heard to argue that the two heads were not issues for determination by the arbitrator.
54 The purpose of framing issues is to limit and direct the court to the real controversy or contest between the parties. Ordinarily, in a civil procedure including arbitral procedure, admitted issues or facts need not be listed as issues for determination by the court or tribunal because an issue arises only when there is joinder of issues; meaning that a material proposition has been affirmed by one party and denied by the other. Where an issue or fact is admitted, the court or arbitral tribunal acts on it as admitted issue or fact on record and is included in and is part of the judgment or award.
55 The court therefore finds that KeRRA has failed to demonstrate that the arbitrator went beyond the scope of the reference as regards the two heads.
Additional facility from KCB
56 KeRRA also challenged the award of the Kshs. 50,000,000 for loss incurred by Parbat in securing an additional facility from KCB Bank Kenya Ltd.
57 Parbat submitted that the Arbitrator found that this amount had been claimed and extensively canvassed by the parties.
58 At pages 10-11 of the Award, the arbitrator observed: -
“(VII) Whether or not the amount of Kshs. 50,000,000.00 for additional facility for KCB should be part of the findings in the award of finance charges?
The Employer submits that the Tribunal awarded the sum of Kshs. 50,000,000.00 for additional facility by KCB as finance charges but that the amount was not part of the Contractor’s claims under finance charges in paragraph 226 of the Contractor’s Response and Counterclaim”. However, in the findings of the initial Award, the Tribunal awarded Kshs. 50,000,000.00/- for additional facility by KCB to be deleted from the total awarded finance charge (ii) of the Award. “The Employer therefore prays that the amount of Kshs. 50,000,000.00/- for additional facility by KCB to be deleted from the total awarded finance charges in the findings” (per Column 6, page 3 of the Employer’s Summary Application dated 5th April 2024.
The Employer submits further that this claim was introduced at the submissions stage of the arbitration and submissions are not pleadings citing the cases of Teejay Estates Ltd v Vihar Construction Ltd [2022] KEHC 121 (KLR) and The Republic Chairman Public Procurement Administrative Review Board & another, Ex Parte Zapkass Consulting and Training Limited & another [2014] eKLR (at para 43, page 7 of Employer’s submissions, dated 1 August 2024)
The Contractor submits in response that “The Contractor did not seek an award on this head of claim” and “The amount cannot therefore be removed from the sum of Kshs. 1,634,971,892.28 as it did not form part of the said amount” (per Column 6, page 11, Contractors Summary dated 8th April 2024). The Contractor’s reference to ‘this head of claim’ without clarification or specifying other head of claim is confusing and misleading as on the one hand the Contractor seeks the correction of the Initial award to include Kshs. 50,000,000.00 for the additional facility by KCB under ‘Finance Charges’ in Column 3, page 4 of the Summary Application of 8th April 2024, while, on the other hand, it does not seek a finance charges award of Kshs. 50,000,000.00 in Column 6, page 11 of the Summary Application “as it did not form part of the sum of Kshs. 1,634,971,892.28 which amount (Kshs. 50,000,000.00) “cannot therefore be removed from Kshs. 1,634,971,892.28.”
The Tribunal clarifies and confirms that the amount and award of Kshs. 50,000,000.00 to the Contractor is part of the finance charges claim for the additional facility by KCB which amount was not included in and therefore not deductible from the computation of the amount of Kshs. 1,634,971,892.28 in paragraph 226 of the Contractor’s Response and Counterclaim. The meaning and composition of Finance Charges are stated and explained in page 86 of the Award in terms of which the amount of Kshs. 50,000,000.00 is part of the award of finance charges albeit not included in the DAB’s decision referenced in paragraph 226 of the Contractor’s Response and Counterclaim.”
59 A court should be slow to interfere with factual finding of the arbitral tribunal unless the finding was based on no evidence or far removed from the evidence or plainly egregious.
60 The above rendition by the arbitrator confirms that the amount of Kshs. 50,000,000.00 was indeed claimed by Parbat and considered after hearing the parties on it. Thus, the court finds that it was not beyond the scope of the reference.
Whether the award contravenes public policy
Finance charges and prolongation costs
61 The claim that the award conflicts with public policy is in relation to the awards for Finance Charges of Kshs. 280,227,239.28 and Prolongation Costs of Kshs. 485,557,882.18.
62 KeRRA asserted that the Arbitrator expressly dismissed these claims in the reasoned award and the reconciliation statement yet erroneously included them in the final award for additional payments. That the award is inimical to the national interest as it would lead to an unjust enrichment of Parbat at the expense of the public, particularly given the country's current financial struggles.
63 On the other hand, Parbat submitted that KeRRA has failed to show how the final award is illegal or inconsistent with public policy. It also submitted that since the amount awarded represents a fair and just determination of the claims, it is not enough to simply state that the amounts are huge as a reason to set aside the arbitral award.
64 “Public policy is a broad concept incapable of precise definition. An award can be set aside under Section 35 (2) (b) (ii) of the Arbitration Act as being inconsistent with the public policy of Kenya if it is shown that it was either
(a) inconsistent with the Constitution or any other law of Kenya whether written or unwritten, or
(b) inimical to the national interest of Kenya,
(c) contrary to justice and morality”. Christ for All Nations v Apollo Insurance Co. Ltd [2002] 2 E.A 366
65 While KeRRA claimed that the two claims had been dismissed in the reasoned award, Parbat indicated that they were mistakenly deducted from the award despite being claimed.
66 Parbat indicated that it filed an application dated 12 November 2024 requesting correction of the initial award to include the claims. That the arbitrator included them in the reconciliation statement award published on 29 November 2024. That KeRRA filed an application dated 3 December 2024 seeking deduction of the amount claiming that it was correctly removed from the summary of items in the additional award. They claimed that, however, the Arbitrator declined to amend or correct the award through his award of 18 March 2025.
67 In the initial award, the arbitrator’s finding as to the finance charges of Kshs. 280,227,239.28 was: -
"It is notable that the Contractor has dealt with interest payment on delayed release of retention money under renumbered issue C(iv) and prolongation costs under C (v) which the Tribunal has duly considered. The Tribunal awards the Conttactor (i) the amounts claimed on the delayed payment of IPCs (under Issue F(i), page 101 of this Award) but disallows the claims for additional accrual of interest on special damages and financial charges under issues F(ii) and F (iii) resppectively."
68 As to the prolongation costs Kshs. 485,557,882.18, the Arbitrator found that: -
"The Tribunal is persuaded that by the Employer's submission that the claim for Kshs. 418,584,381.19 now adjusted upwards to Kshs. 485,557,882 is the same claim for increased scope of works under RWC 489 and dismisses this claim with no award."
69 In the additional award, the Arbitrator’s findings on the latter were: -
"The Tribunal determines on consideration of these submissions that as the sum of Kshs. 418,584,381.19 revised upwards to Kshs. 485,557,882.00 for prolongation costs was dismissed in the initial Award it should not be included in the computation of sum of Kshs. 1,634,971,892.28 as additional payment to avoid duplication and over-compensation as prayed by the Employer. Therefore, it is for the Contractor to ensure that a dismissed claim is not reclaimed in this Additional Award."
70 In the revised summary in the additional award both the prolongation costs and the financial charges were deducted from the sum of Kshs. 2,709,561,599.18 awarded by the DAB. The total revised award was Kshs. 1,587,300,086.13.
71 The reconciliation statement award of 29 November 2024 states that: -
“The Revised Summary below clarifies the Tribunal’s initial Award taking into consideration both the Contractor’s ‘corrections’ of the DAB’s computation of the Contractor’s Total Award of Kshs. 2,709,561,599.18 (per paragraph 226 (e), pages 46 – 48 of the Contractors’ Response and Counterclaim.
1
2
3
4
5
6 Claim for additional Payments for RWC 488, RWC 489 and RWC 491
Delayed Release of Retention
Facility Taken Out with KCB
Outstanding Interim Payment Certificates
Interest Accrued on Delayed Interim Payment Certificates (up to 4th August 2022)
Interest Accrued on delayed Interim Payment Certificates from 5th August 2022 – 13th December 2022 Kshs. 1,634,971,892.28
Kshs. 24,514,929.76
Kshs. 50,000,000
Kshs. 551,790,694.00
Kshs. 166,322,621.00
Kshs. 58,839,958.49
7
9 Prolongation costs under RWC 489 (Kshs. 485,557,882.18)
Special Damages Claim (Kshs. 356,476,391.90) Dismissed
Dismissed
10 Total Award Kshs. 2,486,440,095.53
72 In the letter of 3 December 2024, KeRRA sought the correction of the award by the deduction of the prolongation costs and the finance charges from the claim for additional payments.
73 In the letter dated 18 March 2025 the Arbitrator states: -
“...it is clarified that the sum of Kshs.1,634,971,892.28 comprises the claims for Additional Payment for RWC 488, RWC 489 and RWC 491 and does not include the prolongation costs under RWC 489 that was dismissed. Likewise, the dismissed sum of Kshs. 356,476,391.90 is not included in the sum of Kshs.1,634,971,892.28 as apparent...”
74 The arbitrator found that the prolongation costs were not comprised in the claims for additional payment.
75 Therefore, the court finds that there was no demonstration that the award of this head of claim is contrary to public policy.
76 However, the arbitrator did not explain why the finance charges of Kshs. 280,227,239.28 were not deducted from the additional payment as indicated in the initial award and the additional award. This head of claim is also missing from the reconciliation statement.
77 KeRRA has shown that the award in respect of the finance charges were dismissed in the initial and additional awards.
Disposal
35. In conclusion, except the issue of the financial charges stated in paragraphs 76 and 77 of this ruling in respect of which I will issue appropriate orders and directions, all the other issues in the applications before me have been determined.
36. Accordingly, I make the following orders: -
(1) Given the findings of the court, this is most apt case to suspend my decision on the applications to set aside as well as for recognition and enforcement of the award herein in accordance with the spirit in section 35(4) of the Arbitration Act. Therefore, the final decision on both applications is suspended for 60 days to allow the taking of actions below.
(2) The arbitral award, additional award, reconciliation statement award is remitted to the arbitrator for reconsideration and clarification on the issue of the financial charges only. The arbitrator to issue a supplementary or revised award which includes the clarification directed herein within 60 days from today’s date.
(3) Before fi
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